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Grocery hunt ends: two Downtown Lunds to arrive in '06

Loring Park will get its first full-service market; East Bank locale will replace Rick's

Downtown residents and workers are salivating over the prospect of two new Lunds grocery stores in their midst.

Lund Food Holdings, the parent company of Lunds and Byerly's grocery stores, announced plans Nov. 29 for a new Lunds grocery store on the East Bank at Central & University avenues and in Loring Park at the former Billy Graham/World Wide picture site at 1201 Hennepin Ave. S.

Tres Lund, president and CEO of Lunds and Byerly's, said the company had studied Downtown sites for a decade with the intention of opening one larger store. In the past eight months, however, the real strategy switched to finding two smaller sites tailored to the surrounding neighborhoods, he said.

"We realized we could do smaller stores more affordably and better serve each neighborhood group," he said.

The new stores, slated to open in 2006, will have smaller footprints than most Lunds markets, which average 20,000 square feet. The East Bank Lunds will occupy between 15,000 and 18,000 square feet in a new mixed-use development. Construction on the new retail/housing complex is expected to begin this spring.

The Loring Park Lunds, meanwhile, will occupy 12,000 square feet in the first floor of the former World Wide Pictures building across from Laurel Village's City Market grocery store, 1240 Hennepin Ave. S. The building's top two floors may later be converted to condos or office space, Lund said.

Upscale urban grocers in New York and London, such as Dean & DeLuca and Marks & Spencer, inspired the Downtown Lunds concept. Checkout lanes will be narrower than suburban Lunds and every square inch of space will be maximized for its retail potential, Lund said.

"By and large, the customers living Downtown are looking for an urban experience. We're very much going to be able to do that," he said.

Lund said he expects the stores to draw customers living within three miles of the markets, which would encompass the residential pockets surrounding Downtown's outskirts, including the North Loop, the Mill District along the riverfront and Elliot Park. An estimated 30,000 people live in the Downtown area, according to recent statistics cited by the Downtown Council.

While Lund expects residents will make up the bulk of the customer base, he anticipates Downtown companies will use the grocers' catering services.

John Van Heel, president of the Citizens for a Loring Park Community (CLPC), said he's pleased by the plans for new grocery stores although he's not sure they will be able to serve all Downtown.

"It's great. I'm happy that it's a smaller store," Van Heel said, adding that he'd like to see more grocery stores follow Lunds into the Downtown market. "Given that a lot of Downtown people are on their feet -- traveling between both sides of Downtown can be quite a distance."

Van Heel said he'd like to see a grocer open along Loring Park's stretch of Nicollet Avenue.

Tom Hoch, chair of the Downtown Minneapolis Neighborhood Association (DMNA), which represents an area sandwiched by the two stores, said landing a grocer like Lunds has long been on the neighborhood's wish list.

"As someone who has lived both Downtown and in the Nicollet Island/East Bank neighborhoods, these grocery stores fulfill a huge need for residents of both areas. We have talked about a Downtown grocery store since the 1980s," Hoch said.

Hoch and many other community leaders credited City Councilmember Lisa Goodman (7th Ward), who represents Loring Park and Downtown west of Hennepin Avenue, with leading the battle for a Downtown grocery store.

Mayor R.T. Rybak also credited Goodman for tenaciously advocating for a grocer. "She led this fight," he said.

Goodman, who lives on the same block as the former World Wide Picture building, said she's spent years lobbying Lunds on a Downtown store -- often calling the grocer with information about new residential developments.

Bob Anderson, a Loring Green resident who served as Lund's banker when it merged with Byerly's, introduced Goodman to Tres Lund years ago and has worked with her behind the scenes on landing a store in the neighborhood.

"She's a bulldog," he said. "I'm delighted that it's come to fruition."

Goodman said the path to landing a grocery store has been a series of "dashed dreams." About five deals over the years with other major grocers ultimately fell apart, she said.

"This has been a long time coming and has been a very long road," she said, adding that 12th Street & Hennepin Avenue is the perfect grocery location for many Downtown residents.

Loring Park has an estimated 7,000 residents, including 1,000 renters in the Laurel Village apartment buildings that span four Hennepin Avenue blocks between North 11th Street and Spruce Place, according to Lund's research.

Said Goodman, "It's close enough to so many of the people that need the store the most -- the renters in Loring Park -- and that was a prime objective from my perspective, to have it close to people who don't have cars," she said.

Major bus lines also link the store with residents in Elliot Park and Downtown's riverfront, she added.

Rybak is not content with snaring the two Lunds. He said he would like to see more grocers open in the commercial core, perhaps at City Center, 615 Hennepin Ave. S. The Downtown mall is in the middle of a major repositioning designed to lure new tenants geared toward basic services, including a grocery store.

"This is a tremendous development for Downtown because it provides the basic amenity that all these new residents want, which is the ability to walk to their grocery store," said Rybak, who first pushed for a Downtown Lunds 15 years ago while working for the Downtown Council. "The fact that we got not just one but two is icing on the cake, and the fact that there are even more grocery stores that want to come in says great things."

Andrea Christensen, a leasing consultant with Colliers Turley Martin Tucker, said a City Center grocery store would have a different customer base than the neighborhood Lunds stores.

Russ Nelson, chair of the Downtown Council and president of the commercial real estate firm, Nelson, Tietz & Hoye, echoed Rybak's comments.

"I think [Lunds] will really add to the overall vitality and, candidly, to the attractiveness of Downtown, primarily for the residents but also for the workers," Nelson said.

Grocers have been eyeing the Downtown market for years, but the steep price of real estate Downtown and the shortage of parking spots -- a critical factor for grocers -- has kept many away, retail observers say.

Lund said the 150-stall parking lot adjacent to the former World Wide Pictures building at 1201 Hennepin Ave. S. made the property particularly attractive. "That was really key, and it's oriented toward the front of the store," he said.

A CVS Pharmacy was slated to open in the building earlier this year, but the deal later fell apart after the developer and the city disagreed about street-level windows in the building. The building's historic designation requires that the building feature street-level windows allowing passersby to see inside.

Lund Food Holding also eyed the former Billy Graham Evangelical Association property known as the Lady Slipper Building at 12th Street & Harmon Place but passed on it because of a lack of parking spaces, Lund said.

Shoppers at the East Bank Lunds will park in a ramp built above the grocery store, under current plans. Three to five levels of condos would go above the parking ramp.

Northeast-based Hillcrest Development and St. Paul-based Exeter Realty have partnered on the redevelopment. The city's Planning Commission approved the proposal Nov. 22. The Eastgate strip mall will be razed in early 2005 to make way for the new retail complex.

Meanwhile, Lund Food Holdings has a purchase agreement pending on the 1201 Hennepin Ave. S. building. A site plan for the store is expected to go before the city's Planning Commission in coming weeks.